Here is a letter to the USA Today:
Ensuring the survival of the euro, Mr. Kelemen and Mr. Jones offer a remedy that will abdicate more power to central planners at the European Commission by “strengthening eurozone governance” (Why the EU, and the euro, will survive, 8-30-11).
Unfortunately, the irony is that the inception of the euro put European nations on this very collision course currently playing out across the continent. While free trade amongst Europeans is beneficial, creating a single currency forces a symbiotic relationship between countries. The failure of one nation (Greece, for instance) consequently drags on the economies of those that are thriving, like Germany.
Moreover, a lack of currency competition between sovereign states creates bubbles in the marketplace. With one centralized currency, the signs of a failing economy in a few isolated nations will go relatively unnoticed until a tipping point has already passed. Strong economies like Germany can carry the weight for the entire European Union and the euro, but when a crisis emerges, those same economies of strength are now obliged to bail out the weaker ones.
If the suggested prescription for the European Union is more lending and borrowing, the consequences will be softer money floating around and a devaluation of the euro – hence inflation. Nations that built strong economies are now subject to the collateral damage stemming from irresponsible policies of a few bad apples – all due to currency interdependence.
Craig D. Schlesinger